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Airlines and automakers lift stock indexes to new highs

New York Stock Exchange
Airlines led the way higher for stocks after Delta Air Lines updated its forecast for third-quarter results. Above, the facade of the New York Stock Exchange.
(Richard Drew / Associated Press)

Airline and automaker stocks took off Tuesday, helping U.S. indexes push a bit further into record territory. Trading was again quiet overall, with only modest moves for bond yields, commodities and other markets.

The Standard & Poor’s 500 index rose 5.46 points to 2,534.58 for its sixth straight day of gains. The Dow Jones industrial average climbed 84.07 points to 22,641.67, and the Nasdaq composite rose 15 points to 6,531.71. The Russell 2000 index of small-cap stocks rose 2.49 to 1,511.97. All four indexes are at records.

Airlines led the way after Delta Air Lines updated its forecast for third-quarter results. The Atlanta-based carrier expects to report roughly 2% growth in a key revenue measurement, which would be at the high end of the forecast range it gave a month earlier after accounting for the hit it took from Hurricane Irma.

Delta jumped 6.6% to $51.25, notching its best day since January 2015. United Continental, American Airlines Group and Southwest Airlines each rose more than 4%.

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Outside of airlines and a handful of other big movers, though, markets were generally quiet. No big economic reports were on the docket and few companies reported quarterly results.

“This is the calm before we get hit with some more impactful information,” said Steve Chiavarone, portfolio manager at Federated Investors.

In upcoming weeks, the market will be looking to hear more about whether Washington will be able to cut tax rates. Investors may also get clues about who the next chairman of the Federal Reserve will be, and most companies will start reporting their third-quarter results.

In the meantime, some economic reports may look abnormally weak because of the hurricanes that have recently struck the United States, such as this week’s upcoming report on hiring. But investors are expecting to see temporarily weaker numbers, which would limit the effect, Chiavarone said.

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General Motors and Ford Motor were among the market’s top performers after each reported strong U.S. sales growth for last month. It’s a turnaround for automakers, which had seen sales drop across the industry through the year’s first eight months.

GM climbed 3.1% to $43.45. Ford rose 2.1% to $12.34.

Lennar advanced 4.8% to $55.35 after the home builder reported stronger quarterly sales and earnings than analysts expected. Interest rates remain relatively low, and the strengthening job market is helping more people decide to buy homes.

Shares of Equifax and Wells Fargo both rose, even though representatives for the companies received tongue lashings on Capitol Hill.

Equifax rose 2.4% to $110.45 after House members grilled the credit reporting firm’s former chief executive over the data hack that exposed the personal information of as many as 145 million Americans.

Wells Fargo edged up 0.2% to $55.58 after a Senate committee questioned its CEO on the bank’s sales-practice scandal, in which employees had signed customers up for accounts without their knowledge or consent.

The yield on the 10-year Treasury note fell to 2.32% from 2.34%. The two-year yield fell to 1.46% from 1.49% and the 30-year yield fell to 2.86% from 2.87%.

The dollar inched up to 112.90 yen from 112.65 yen. The euro rose to $1.1752 from $1.1746 and the British pound fell to $1.3247 from $1.3286.

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In overseas markets, Japan’s benchmark Nikkei 225 rose 1% to its highest closing level in two years. Hong Kong’s Hang Seng jumped 2.2%. France’s CAC 40 rose 0.3%, and the FTSE 100 in London gained 0.4%. Stock markets were closed in Germany, China and South Korea for holidays.

Gold slipped $1.20 to settle at $1,274.60 an ounce. Silver was close to flat at $16.65 an ounce. Copper rose 1 cent to $2.96 a pound.

Benchmark U.S. crude fell 16 cents to settle at $50.42 a barrel. Brent crude, the standard for international oil prices, fell 12 cents to $56 a barrel. Natural gas fell 2 cents to $2.90 per 1,000 cubic feet, heating oil fell 2 cents to $1.75 a gallon and wholesale gasoline rose a penny to $1.57 a gallon.


UPDATES:

2:55 p.m.: This article was updated with closing prices, context and analyst comment.

7:25 a.m.: This article was updated with market prices and context.

This article was originally published at 7 a.m.


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